Core Viewpoint - Budweiser APAC's Q3 performance largely met expectations, with the Chinese market under pressure as anticipated. The short-term recovery in the Chinese market will take time, but the current stock price reflects this pessimistic outlook. Long-term confidence remains in the group's premiumization strategy in the Asia-Pacific region. The target price is maintained at HKD 9.5 with a "Buy" rating [1]. Summary by Category - **Q3 Performance**: Budweiser APAC's Q3 results were in line with expectations, indicating stability despite market challenges [1]. - **Chinese Market Outlook**: The Chinese market continues to face pressure, and a recovery is expected to take time [1]. - **Stock Price Reflection**: The current stock price is believed to have already factored in the negative outlook for the Chinese market [1]. - **Long-term Strategy**: Confidence in the group's ongoing premiumization strategy in the Asia-Pacific region remains strong [1]. - **Target Price and Rating**: The target price is set at HKD 9.5, and the company maintains a "Buy" rating [1].

Core Viewpoint - The report from Jianyin International indicates a downward adjustment in Budweiser APAC's sales growth assumptions for the Chinese market due to weak performance in the first nine months of the year and cautious sales outlook, leading to a 9% reduction in target price from HKD 9.4 to HKD 8.6 while maintaining an "outperform" rating [1] Group 1: Financial Performance - Budweiser APAC's third-quarter performance was weak but generally in line with expectations, with the Chinese market continuing to underperform [1] - The company is expected to see EBITDA margin increase by 1.3 percentage points to 29.5% due to healthy channel inventory, a mild cost environment, and operating leverage effects [2] Group 2: Market Strategy - Management is prioritizing route-to-market (RTM) upgrades, enhancing penetration in online, offline, and O2O channels for household consumption, and increasing investment in core brands to gradually regain market share in China, although the timing of a turnaround remains uncertain [1] - In the Indian market, Budweiser APAC is benefiting from a strong trend towards premiumization, with expectations of a 1.5% revenue growth in the Asia-Pacific region by 2026 [1] Group 3: Regional Performance - In South Korea, Budweiser APAC continues to outperform peers, achieving market share gains in both household consumption and on-premise channels despite a weak demand environment [2] - The Southeast Asia region is projected to see a revenue growth of 6.4% in 2024, with a volume growth of 2.3% and an average selling price (ASP) increase of 4% [2]

Core Viewpoint - The company's Q3 2025 performance slightly exceeded expectations, driven by a greater-than-expected decline in costs and expenses [1][2]. Revenue Performance - Q3 2025 revenue, sales volume, ASP, and EBITDA showed year-on-year changes of -8.4%, -8.6%, +0.1%, and -6.9% respectively, with gross margin and net margin both increasing by 0.1 percentage points [1]. - In China, revenue, sales volume, ASP, and EBITDA experienced declines of -15.1%, -11.4%, -4.1%, and -17.4% respectively, indicating a slow recovery in the market [1]. Regional Analysis - Western China: The recovery pace in the industry is slow, with Q3 2025 sales volume down by -17.4% due to weak consumer confidence and slow recovery in the dining channel, alongside proactive inventory reduction by the company [1]. - Eastern Region: The Korean market remained stable with sales volume flat year-on-year, benefiting from high-end product price increases and a shift towards mid-to-high-end products in the non-current beverage channel [2]. - Indian Market: Strong performance with double-digit revenue growth in Q3 2025 [1]. Cost and Profitability - Q3 2025 cost per ton decreased slightly by 0.4% due to lower raw material costs, while SG&A expenses increased by 0.7 percentage points to 35.11% [2]. - EBITDA in the Western region fell by -11.9%, with the Chinese market experiencing a -19% decline due to operational leverage effects [2]. Profit Forecast and Valuation - The company maintains EBITDA forecasts of $1.627 billion and $1.715 billion for 2025 and 2026 respectively [2]. - The current stock price corresponds to 6.7x and 6.1x EV/EBITDA for 2025 and 2026, with a target price of HKD 9.80 per share, indicating a potential upside of 22.5% [2].

Core Insights - Budweiser APAC reported Q3 2025 revenue of $1.555 billion, with an organic year-on-year decline of 8.4% [1] - Normalized EBITDA for Q3 2025 was $438 million, reflecting a year-on-year decrease of 6.9% [1] - Normalized net profit attributable to the parent company was $204 million, down 9.3% year-on-year [1] Revenue and Profitability - Q3 2025 sales volume reached 2.2512 million kiloliters, showing an organic year-on-year decline of 8.6% [1] - Revenue per hectoliter in Q3 2025 increased by 0.1% year-on-year [1] - Gross margin stood at 51.4%, with a slight year-on-year increase; normalized EBITDA margin was 28.2%, up 0.46 percentage points year-on-year, benefiting from commodity price advantages and cost management measures [1] Regional Performance - In the Western Asia-Pacific region, Q3 2025 revenue and normalized EBITDA saw organic declines of 12.0% and 11.9%, respectively, with sales volume down 9.9% year-on-year [1] - The Indian market showed strong performance with double-digit revenue growth in Q3 2025, contributing positively to EBITDA [1] - In the Eastern Asia-Pacific region, Q3 2025 revenue and normalized EBITDA increased by 3.9% and 8.7% year-on-year, respectively, with sales volume down 0.6% [1] - South Korea's sales volume remained stable, outperforming the overall market in both ready-to-drink and non-ready-to-drink channels, supported by effective revenue management and a favorable brand mix [1] China Market Dynamics - In Q3 2025, revenue and normalized EBITDA in China experienced organic declines of 15.1% and 17.9%, respectively, with sales volume down 11.4% year-on-year [2] - Revenue per hectoliter in China decreased by 4.0% year-on-year, attributed to increased investment in innovative products and brand promotion, as well as challenges in inventory management [2] - The company has optimized channel inventory, with significant reductions in inventory volume and turnover days, outperforming industry averages [2] - Future strategies include strengthening non-ready-to-drink channels and investing in premium brands like Budweiser and Corona to improve sales in China [2] Profit Forecast and Valuation - Due to weak beer demand in the Chinese market, the company has revised down its net profit forecasts for 2025-2027 to $589 million, $682 million, and $733 million, representing reductions of 15%, 7%, and 6%, respectively [3] - The current stock price corresponds to a PE ratio of 23x, 20x, and 19x for 2025-2027 [3] - The company maintains a positive outlook on its competitive advantage in the high-end and super high-end segments, sustaining a "buy" rating [3]

Core Insights - The company reported a decline in revenue and normalized EBITDA for Q3 2025, with total revenue of $15.55 billion and normalized EBITDA of $4.38 billion, reflecting year-on-year decreases of 8.4% and 6.9% respectively [1][2] - The Asia-Pacific region faced significant challenges, particularly in China, where revenue dropped by 15.1% due to a decline in high-end dining and ongoing inventory reduction efforts [1][3] - In contrast, the Asia-Pacific East region showed a revenue increase of 3.9%, driven by price increases and product upgrades, despite a slight decline in sales volume in South Korea [2][3] Asia-Pacific West Region - The Asia-Pacific West region experienced a revenue decline of 12.0% and a normalized EBITDA decrease of 11.9% in Q3 2025 [1] - The revenue drop was attributed to a 15.1% decline in the China region, with sales volume down 11.4% and price per ton down 4.1% [1] - The company is increasing investment in innovative products and expanding non-immediate consumption channels to counteract these declines [1][3] Asia-Pacific East Region - The Asia-Pacific East region saw a revenue increase of 3.9%, with a slight decline in sales volume of 0.6% in South Korea [2] - Price per ton increased by 4.5%, primarily due to price hikes and product structure upgrades [2] - The company achieved an 8.7% increase in normalized EBITDA, with a 1.4 percentage point improvement in EBITDA margin [2] Strategic Adjustments - The company is actively adjusting its operations in response to ongoing demand pressures, focusing on building family-oriented sales channels and introducing new product packaging [3] - There is a continued emphasis on innovation, with new product launches expected to contribute positively to future growth [3] - The company has streamlined its channels and reduced inventory levels, positioning itself for a more favorable operational environment in the coming year [3] Investment Outlook - The company maintains a "recommended" rating despite the pressures in the Chinese market, with positive performance in South Korea and India providing some offset [3] - Profit forecasts for 2025-2027 have been adjusted downward, with expected normalized net profits of $6.71 billion, $7.17 billion, and $7.54 billion respectively [3] - The target price remains at HKD 10, corresponding to a PE ratio of 24 times for 2026 [3]

Core Insights - The integration of "digital intelligence" and "green" initiatives is advancing corporate ESG (Environmental, Social, and Governance) practices from conceptual advocacy to systematic and intelligent implementation [1][3] - The fourth annual forum on sustainable development for listed companies, themed "Digital Intelligence and Green Movement Leading New Journey," was held in Beijing, revealing the winners of the "Ernst & Young Sustainable Development Annual Best Awards 2025" [1][3] - The awards highlighted the innovative practices of Chinese companies in the ESG and AI integration space, showcasing their contributions to building a modern industrial system and achieving high-quality development [1][3] Group 1: Event Overview - The forum featured 2 special awards, 12 outstanding companies, 2 distinguished individuals, 16 excellent cases, and 1 special contribution award for technological innovation in ESG development [1][3] - The focus of this year's awards was on the role of digitalization as an innovative driving force, emphasizing zero-carbon technology and AI's role in enhancing productivity [1][3] Group 2: Industry Trends - Ernst & Young's China Chairman noted that 2023 is a pivotal year for global sustainable development, marking the 10th anniversary of the Paris Agreement and the 20th anniversary of the "Green Mountains and Clear Water are Gold and Silver Mountains" concept [3] - The rapid advancement of AI technology is accelerating the digital and green transformation of Chinese enterprises, positioning them as key players in sustainable development [3][4] Group 3: AI and ESG Integration - Companies are encouraged to integrate ESG into their core strategies and leverage technology to transform sustainable development into a quantifiable and operational value system [4][5] - Ernst & Young has introduced AI-driven solutions, including the DeepSeek model and the METIS AI platform, to support enterprises in their green transformation efforts [4][5] Group 4: Award Evaluation and Criteria - The evaluation framework for the awards includes nine dimensions, focusing on technological innovation, low-carbon benefits, and social responsibility [5] - This year, an AI assessment component was introduced to enhance the evaluation process, utilizing a comprehensive ESG information database [5] Group 5: Future Outlook - Ernst & Young aims to deepen its professional service capabilities, helping companies embed sustainable development into their strategic core and operational processes [6]

Investment Rating - The report maintains a "Recommended" investment rating for Budweiser APAC (01876.HK) with a target price of HKD 10 [1][7]. Core Insights - The company reported a total revenue of USD 4.691 billion and normalized EBITDA of USD 1.421 billion for the first three quarters of 2025, reflecting a year-on-year decline of 6.6% and 7.7% respectively. The normalized net profit attributable to the parent company was USD 678 million, showing a decrease of 12.7% [1][7]. - In Q3 alone, the company achieved total revenue of USD 1.555 billion and normalized EBITDA of USD 438 million, with year-on-year declines of 8.4% and 6.9% respectively. The normalized net profit for Q3 was USD 204 million, down 9.3% year-on-year [1][7]. - The report highlights that the company is undergoing a structured adjustment phase, focusing on reducing inventory and preparing for future growth despite facing significant pressure in the Chinese market [7]. Financial Summary - **Revenue Forecasts**: - 2024A: USD 6,246 million - 2025E: USD 5,870 million - 2026E: USD 6,014 million - 2027E: USD 6,139 million - Year-on-year growth rates are projected at -8.9% for 2024, -6.0% for 2025, 2.4% for 2026, and 2.1% for 2027 [3][12]. - **Net Profit Forecasts**: - 2024A: USD 726 million - 2025E: USD 671 million - 2026E: USD 717 million - 2027E: USD 754 million - Year-on-year growth rates are projected at -14.8% for 2024, -7.5% for 2025, 6.7% for 2026, and 5.2% for 2027 [3][12]. - **Earnings Per Share (EPS)**: - 2024: USD 0.05 - 2025: USD 0.05 - 2026: USD 0.05 - 2027: USD 0.06 [3][12]. - **Valuation Ratios**: - Price-to-Earnings (P/E) ratio is projected at 19 for 2024, 20 for 2025, 19 for 2026, and 18 for 2027 [3][12]. Market Performance - The report indicates that Budweiser APAC's performance in the Asia-Pacific region is under pressure, particularly in China, where revenue declined by 15.1%. However, the company is seeing double-digit growth in high-end and super high-end products in India [7][8]. - The company is actively adjusting its operational strategies, focusing on family-oriented channels and innovative product launches to counteract the declining demand [7][8].

Investment Rating - The report maintains a "Buy" rating for Budweiser APAC (1876.HK) [4] Core Views - Budweiser APAC reported Q3 2025 revenue of $1.555 billion, with a year-on-year decline of 8.4% [1] - Normalized EBITDA for the same period was $438 million, down 6.9% year-on-year, while normalized net profit attributable to shareholders was $204 million, a decrease of 9.3% [1] - The company is focusing on high-end and super high-end segments to leverage competitive advantages despite a weak beer demand in the Chinese market [4] Summary by Sections Overall Performance - Q3 2025 sales volume was 2.2512 million kiloliters, reflecting a year-on-year decline of 8.6% [1] - Revenue per hectoliter increased by 0.1% year-on-year, with a gross margin of 51.4%, showing a slight increase [1] Regional Performance - Western Asia-Pacific region saw revenue and normalized EBITDA decline by 12.0% and 11.9% year-on-year, respectively, with sales volume down 9.9% [2] - The Indian market performed well with double-digit revenue growth, positively impacting EBITDA [2] - Eastern Asia-Pacific region experienced revenue and normalized EBITDA growth of 3.9% and 8.7% year-on-year, respectively, despite a slight decline in sales volume [2] China Market Insights - In Q3 2025, revenue and normalized EBITDA in China fell by 15.1% and 17.9% year-on-year, respectively, with sales volume down 11.4% [3] - The decline was attributed to inventory management and weak on-the-go channel performance [3] - The company is focusing on optimizing channel inventory and enhancing contributions from non-on-the-go channels [3] Financial Forecasts - The report revises down the net profit forecasts for 2025-2027 to $589 million, $682 million, and $733 million, representing reductions of 15%, 7%, and 6% respectively [4] - The current stock price corresponds to a PE ratio of 23x for 2025, 20x for 2026, and 19x for 2027 [4]

Core Viewpoint - UBS reports that Budweiser APAC (01876) is expected to see a decline in revenue and adjusted EBITDA for Q3 2025, with figures of $1.555 billion and $438 million respectively, representing year-on-year decreases of 8.8% and 8.6%, which are below the bank's expectations by 1-3% and generally in line with market expectations [1] Financial Performance - Revenue for Q3 2025 is projected at $1.555 billion, down 8.8% year-on-year [1] - Adjusted EBITDA for Q3 2025 is projected at $438 million, down 8.6% year-on-year [1] Earnings Forecast Adjustment - UBS has lowered its earnings forecasts for Budweiser APAC for 2025 to 2027 by 7% to 9% to reflect ongoing weakness in the Chinese market and limited visibility for Q4 [1] - The anticipated recovery is expected to be delayed until 2026 [1] Investment Rating and Target Price - UBS maintains a "Buy" rating for Budweiser APAC, citing the ongoing premiumization in household channels, attractive valuations, and robust cash reserves that support stable dividends in 2025 [1] - The target price has been reduced from HKD 9.07 to HKD 8.75 [1]

Core Viewpoint - UBS reports that Budweiser APAC (01876) is expected to see a decline in revenue and adjusted EBITDA for Q3 2025, with figures of $1.555 billion and $438 million respectively, representing year-on-year decreases of 8.8% and 8.6%, which are slightly below UBS's expectations by 1-3% but generally in line with market expectations [1] Financial Performance - Revenue for Q3 2025 is projected at $1.555 billion, down 8.8% year-on-year [1] - Adjusted EBITDA for Q3 2025 is projected at $438 million, down 8.6% year-on-year [1] Earnings Forecast - UBS has lowered its earnings forecasts for Budweiser APAC for 2025 to 2027 by 7% to 9% due to ongoing weakness in the Chinese market and limited visibility for Q4 [1] - The anticipated recovery is expected to be delayed until 2026 [1] Investment Rating - UBS maintains a "Buy" rating for Budweiser APAC, citing the ongoing premiumization in household channels, attractive valuations, and robust cash reserves that support stable dividends in 2025 [1] - The target price has been adjusted from HKD 9.07 to HKD 8.75 [1]